JR Central takes majority stake in train builder

01 Oct 2008

NIPPON SHARYO: Central Japan Railway Co revealed in August that it planned to take a 50·1% stake in rolling stock builder Nippon Sharyo Ltd. JR Central already holds a 1·8% stake in the supplier, and it is now offering up to ¥370 per share to obtain a majority holding. The offer is worth ¥26bn and is valid until October 7.

If the deal goes ahead, Nippon Sharyo would become a ‘consolidated subsidiary’ of JR Central. The operator said last month that the move was intended mainly to ensure ‘smoother and more comprehensive’ development of vehicles for the planned 290 km first stage of the Chuo Maglev line between Tokyo and Nagoya. The purchase would also ‘enhance JR Central’s technical capability’ and ensure that it was fully involved in the design and manufacture of maglev vehicles and other rolling stock.

At the moment Nippon Sharyo is building N700 Shinkansen trainsets for JR Central as well as rolling stock for other operators. In the year to March 31 2008 the manufacturer recorded a net loss of ¥5·5bn compared with a net profit of ¥959m in 2006-07. The loss was attributed mainly to the higher cost of raw materials.